Capitalizing Interior Painting? | Chicago Tax Guidelines
When it comes to improving or maintaining your commercial or residential property in Chicago, IL, knowing whether interior painting qualifies as a capital expense or a deductible repair can have major tax implications. Let’s explore how this works and what it means for property owners.
What Does It Mean to Capitalize Interior Painting?
Capitalizing a cost means treating it as a long-term investment rather than an immediate expense. This cost is then depreciated over time. If your painting project adds value to your property or extends its life, you may be required to capitalize it.
Investopedia defines a capital improvement as a permanent structural change that enhances a property’s value, significantly affecting its classification for tax purposes.
IRS Guidelines on Painting: Expense or Capital Improvement?
The IRS typically classifies routine maintenance, like repainting worn walls, as a deductible expense. However, if painting is part of a larger improvement project (like a renovation or a major remodel), it may need to be capitalized as part of the building’s improvement costs.
Learn more: IRS Publication 946
Interior Painting & Chicago Property Owners
If you own or manage property in Chicago, understanding local real estate standards and federal tax laws is key. Painting your interior may be considered a capital improvement when:
It's part of a full remodel
It upgrades the space beyond its original state
It directly adds to the building’s longevity or efficiency
Benefits of Capitalizing Painting Costs
Spread deductions over several years via depreciation
Boost your building’s asset value
Enhance long-term tax planning and record keeping
How to Determine the Proper Treatment
Ask yourself:
Was the painting done as routine maintenance or part of a renovation?
Did it significantly improve or prolong the asset's life?
Is it linked to a capital project, like a leasehold improvement?
Consulting a professional painter with tax-smart experience—like American Brightstar—ensures the proper treatment.
Chicago’s Best Practices for Interior Painting Projects
Use licensed and insured painters.
Keep all project invoices and documentation.
Clarify with your CPA whether costs should be expensed or capitalized.
Maintain before-and-after photos for recordkeeping.
Get a Free Estimate with American Brightstar
When it comes to interior painting in Chicago, American Brightstar helps you choose the right path. Whether it’s routine maintenance or part of a larger renovation, our experienced team ensures quality and compliance.
Ready to transform your space and maximize your tax benefits?
Get in touch with American Brightstar today for your free, no-obligation estimate and expert advice tailored to your property!
Contact us now for a FREE estimate – Let’s give your property a fresh, IRS-compliant makeover!
